AMENDMENT
NUMBER ONE  to the  Guaranty dated as of July 22, 2003  made by  AAMES FINANCIAL
CORPORATION  in favor of  CITIGROUP GLOBAL MARKETS REALTY CORP.

This
AMENDMENT NUMBER ONE (this Amendment) is made as of this 16th day of
December, by and between AAMES FINANCIAL CORPORATION (Guarantor) and
CITIGROUP GLOBAL MARKETS REALTY CORP. (the Lender), to the GUARANTY,
dated as of July 22, 2003, made by the Guarantor in favor of Lender (the
Guaranty).

# RECITALS

WHEREAS,
Guarantor has requested that Lender agree to the amendments to the Guaranty as set forth
herein; and

WHEREAS,
Lender has consented to such amendments to the Guaranty as set forth herein.

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:

SECTION
1. Effective as of January 1, 2004, clause (i) of Section 3(b) of the Guaranty
is hereby deleted in its entirety and replaced with the following:

| | "(i)     
Maintenance of Tangible Net Worth. The Tangible Net Worth of the Guarantor, on a  consolidated basis and on any given day, shall be equal to or greater than $60,000,000."
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SECTION
2. Defined Terms. Any terms capitalized but not otherwise defined herein
shall have the respective meanings set forth in the Guaranty.

SECTION
3. Representations. In order to induce Lender to execute and deliver this
Amendment, the Guarantor hereby represents to Lender that as of the date hereof,
after giving effect to this Amendment, the Guarantor is in full compliance with
all of the terms and conditions of the Guaranty.



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SECTION
4. Limited Effect. Except as expressly amended and modified by this
Amendment, the Guaranty shall continue in full force and effect in accordance
with its terms. Reference to this Amendment need not be made in the Guaranty or
any other instrument or document executed in connection therewith, or in any
certificate, letter or communication issued or made pursuant to, or with respect
to, the Guaranty, any reference in any of such items to the Guaranty being
sufficient to refer to the Guaranty as amended hereby.

SECTION
5. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO CONFLICT OF LAWS DOCTRINE APPLIED IN SUCH STATE.

SECTION
6. Counterparts. This Amendment may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.

[SIGNATURE
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IN
WITNESS WHEREOF, Guarantor and Lender have caused this Amendment to be executed
and delivered by their duly authorized officers as of the day and year first
above written.

| | AAMES
FINANCIAL CORPORATION,Guarantor
| | -------------------------------------

| | By:_________________________________________________________
        Name:_______________________________________________________
Title:________________________________________________________
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | CITIGROUP
GLOBAL MARKETS REALTY CORP.,  Lender
| | ----------------------------------------------

| | By:_________________________________________________________
        Name:_______________________________________________________
Title:________________________________________________________
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------